BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Profit taking escalated at the end of last week with the key index stumbling to the 1,660-support level at the end of the session.
Much of the selling were on banking entities and utility heavyweights that also saw most sector indices ending the week lower.
At the same time, the FBM KLCI’s retreat bucked the generally positive regional market undertone with foreign funds again the main sellers. Market breadth was also negative with traded volumes slipping slightly to just above 3 billion shares.
With the end of 3Q 2024 beckons, there could be some window dressing activities in the day ahead albeit there is little to suggest that the upsides could be significant at this juncture.
Although the market’s undertone is still largely holding firm, meaningful upsides could still be elusive due to the lack of short-term impetuses.
As it is, the key index’s valuations are already fair after its strong YTD (tear-to-date) gains that have also largely reflected its fundamentals.
Consequently, the tentative buying interest could still prevail which may curtail the upside potential over the near-term with market players also scouring for new leads that could still leave the key index mostly on a range-bound trend between the 1,650 and 1,675 levels for the most part.
For now, the targets are at 1,665 and 1,670 points while the supports are at 1,654 and 1,651 points respectively.
Malacca Securities Research
The FBMKLCI and FBM Small Cap indices ended lower last Friday as selling pressure persisted amid a stronger ringgit environment.
Following a mixed US inflation data where PCE (Personal Consumption Expenditures Price Index) declined 2.2% year-on-year (yoy) while core PCE rose 2.7% yoy, Wall Street closed on a mixed note. The Dow advanced to new highs but both the S&P 500 and Nasdaq declined.
This week, traders will be closely watching the (i) ISM manufacturing PMI; (ii) non-farm payroll; and (iii) unemployment claims.
Additionally, we expect the impact of China’s stimulus packages to offer limited upside following last week’s strong surge.
In the commodities market, Brent crude traded around US$72/barrel as China’s stimulus measures offset planned OPEC+ supply increases.
Meanwhile, gold hovered around US$2,660/oz supported by dovish signals from central banks while crude palm oil (CPO) prices retraced but still above RM4,000/metric tonne as the stronger ringgit kept the rally in check.
The FBM KLCI index closed lower towards the 1,660 level. However, the technical readings on the key index were mixed with the MACD histogram turned into negative territory but the RSI stayed above 50.
The resistance is envisaged around 1,675-1,680 while the support is set at 1,640-1,645. – Sept 30, 2024
